After decades of slogans like "See the USA in Your Chevrolet" and "Baseball, Hot Dogs, Apple Pie and Chevrolet," General Motors GM +3.02% has retreated from its overtly patriotic marketing approach since emerging from government-funded bankruptcy. Maybe that was a wise move, given that American taxpayers paid for the $50 billion bailout of "Government Motors" and not all of them were happy about it.

But another dynamic also seems to be at work: The auto maker has fundamentally shifted its focus. American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting from the bailout of America's erstwhile automotive icon.

GM's most recent round of investments vividly demonstrates the change. At last week's Shanghai Auto Show, GM announced it would spend $11 billion on new production facilities in China by 2016, creating some 6,000 new jobs there. By contrast, GM has invested only $8.5 billion in U.S. operations since its 2009 bankruptcy, and since 2005 the number of workers it employs in North America has fallen by 76,000, according to the industry publication Automotive News.

At first glance, this seems little more than a function of China becoming the world's largest auto market. But GM's investments aren't merely about meeting Chinese demand, which has actually slowed in recent years. According to statements to the press made by company officials at the Shanghai Auto Show, GM is targeting 100,000-plus exports of Chinese-made cars this year, a record, with export growth likely to be more than 50%.

Once merely an important growth market, China is fast becoming GM's global export base, and the change can be seen in the very structure of the company.

For those who have short memories or never watched the Presidential debates:

Last October 2012, Mr. Obama chided Mitt Romney at a presidential debate by saying, “You know, if we had taken your advice, Gov. Romney, about our auto industry, we’d be buying cars from China instead of selling cars to China.”

With GM’s technology and manufacturing jobs streaming into China even as other auto makers invest in the U.S., taxpayers might well wonder what their billions of bailout dollars really bought. Certainly the future that the Obama administration has promisedone of high-tech green cars designed and built by GM and Chrysler in America for export around the worlddoesn’t seem to be forthcoming. Instead, GM has become what one might call America’s subprime auto maker, increasingly dependent on cheap credit, fueled by the Federal Reserve’s near-zero interest rate policy, to support its made-in-China production strategy.

Ultimately this new direction is less a problem for the administration, which is in the process of divesting its shares of “New GM” at a loss, than it is for General Motors. After decades of wrapping itself in Old Glory and campaigning against “import” brands, GM is becoming the new face of Chinese-made cars. If GM’s executives think the bailout made the company a political football, wait till they see what happens when American car buyers start finding “Made in China” tags on Chevrolets and Cadillacs.

“You know, if we had taken your advice, Gov. Romney, about our auto industry, wed be buying cars from China instead of selling cars to China.”

When GM built a plant in China the Chinese built a duplicate next door. One day the Army showed up and demanded copies of all the intellectual material. The Chinese then started producing identical cars next door. There are no intellectual property rights. Any company that does business in China deserves whatever happens to them.

BTW, it cost billions to design a new car. Imagine the jump on profitability you get if you simply steal the design?

No Chevy Suburban or GMC Acadia for me; I’ll buy Ford after my 2002 Jeep Grand Cherokee Laredo gives-up the ghost, someday. There’s a lot of years left in that pristine unit. Plus, too many electronic things to deal with in the new vehicles; I just don’t need/want them.

7
posted on 05/05/2013 12:33:09 PM PDT
by carriage_hill
(AR-10s & AR-15s are the Muskets of the 21st Century. Free men need not ask permission.)

American taxpayers may have rescued GM during its moment of need, but it is China that is disproportionately benefiting...
***It figures. What was obvious to some of us at the time but ridiculed by statists... has now become obvious in hindsight.

I’m not conflicted. China is cleaning our clock. We are giving them the rope to hang us. This is going to be the Chinese century. I didn’t believe that when I heard that in the 1980s because I thought we would fight to keep on top. I didn’t realize that communist subversives and US financiers and bankers would all combine to sabotage us.

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